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Socio-Economic and Environmental Analyses of Sustainable Public Transport in the Philippines

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Socio-Economic and Environmental Analyses of Sustainable Public Transport in the Philippines sustainability Article Socio-Economic and Environmental Analyses of Sustainable Public Transport in the Philippines Casper Boongaling Agaton 1,2,* , Angelie Azcuna Collera 3 and Charmaine Samala Guno 4 1 Copernicus Institute of Sustainable Development, Utrecht University, Princetonlaan 8a, 3584 CB Utrecht, The Netherlands 2 Utrecht University School of Economics, Utrecht University, Kriekenpitplein 21-22, 3584 EC Utrecht, The Netherlands 3 Research Center for Human Development Studies, University of Science and Technology of Southern Philippines-Cagayan de Oro Campus, Misamis Oriental 9000, Philippines; [email protected] 4 Mindoro State College of Agriculture and Technology, Calapan City Campus, Masipit, Calapan City, Oriental Mindoro 5200, Philippines; [email protected] * Correspondence: [email protected] Received: 18 May 2020; Accepted: 5 June 2020; Published: 9 June 2020 Abstract: Electric vehicles are regarded as energy transition technology towards more sustainable and environment-friendly transportation systems. Despite the benefits of reducing the dependence on fossil fuels and greenhouse gas emissions, the adoption of electric vehicles faces several obstacles ranging from financing issues, government policies, and public acceptance. This study aims to identify the economic, environmental, and social impact of the adoption of electric vehicles for public transportation. Using the Philippines as a case study, the findings highlight the economic advantage of investing in electric public transportation with high public acceptance. The results further identify significant decrease in air pollution, reduction of greenhouse gas emissions and encourage lowering the reliance on imported fossil fuels by shifting the public transport from conventional to electric transport system. This study recommends stricter implementation of government policies on modernized public transportation, stronger government support on financing mechanisms, establishment of charging stations in public and private terminals, and boosting programs for developing local-made electric vehicles. To make electric vehicle more environment-friendly, the government must accelerate the energy transition by increasing the electricity share from renewable sources and investing in more sustainable sources of energy. Keywords: electric vehicle; sustainable; public transport; investment; economic analysis; environmental impact; social acceptance; developing countries 1. Introduction Environmental problems relating to air pollution and greenhouse gas (GHG) emissions from combustion of fossil fuels have prompted different countries and regions to find more sustainable modes of transportation. Electric vehicles (EVs) have emerged as highly promising technology that are expected to play a major role in energy transition towards a sustainable transport system in the next decades. In 2018, over two million EVs were sold worldwide and this number is expected to rise to 56 million by 2040 [1]. With this trend, EVs are expected to significantly reduce GHG emissions, improve air quality, lessen dependence on fossil fuels, and enable the transition to renewable energy and sustainable transportation [2,3]. In most developed countries, governments are giving financial incentives including subsidy schemes, purchase tax incentives, rebates and specific local extra-regulatory benefits for EVs owners; providing legal measures and privileges that support Sustainability 2020, 12, 4720; doi:10.3390/su12114720 www.mdpi.com/journal/sustainability Sustainability 2020, 12, 4720 2 of 14 EVs; and developing public charging infrastructures to make the adoption of electric mobility more attractive [4–7]. On the other hand, in developing countries, governments give modest incentives like import duty reductions and purchase subsidy; encourage shifting to non-motorized vehicles and biofuel blending for transportation and industrial uses; battery swapping and charging stations; and adaptation of EVs that suits the local settings such as electric scooters in India, electric “tuk-tuks” in Thailand and Kenya, and electric jeepney (e-jeepney) and electric tricycle (e-trike) in the Philippines [8–10]. Despite its promise, investment in EVs in developing countries is challenged by high overnight cost, availability of charging infrastructure, policy support, and low public acceptance. These challenges give us the motivation to make a study that analyzes the adoption of EVs for public transportation focusing on developing countries. Numerous works discuss the investment in EVs for public transportation from various perspective. The most common economic indicators include total cost of ownership (TCO), least cost, net present value (NPV), payback period (PBP), internal rate of return (IRR), and return on investment (ROI) [11–14]. For instance, [12] compared the TCO of battery EVs and internal combustion vehicles for local health authorities, municipalities, and special purpose authorities between passenger cars and mixed-use small light commercial vehicles. The research highlights economic sense to adopt EVs for a positive although relatively small percentage of the public sector fleet under the current price and cost structure. In another study, [13] proposed a dynamic model based on the TCO from well to wheel, together with NPV, IRR, and PBP for the three groups of transportation, namely diesel, compressed natural gas, and electric buses in Turkey. The results identified that the electric bus concept with a charging station depot achieving sustainable and zero-emission goals drive the advancement of electric bus concept for Istanbul Public Transport. Further, [14] analyzed the difference in costs of two types of buses serving urban public transportation systems in Latvia: diesel-fueled internal combustion engine bus and battery electric bus. The findings showed that initial investments of changing public transportation fleet to electric buses and the costs of battery replacement still outweigh the monetary advantages gained from lower operational costs and additional environmental benefits. Considering the market price uncertainty as a factor that affects investment, [15] extended the TCO into a real option model to identify the optimal timing of adoption of EVs. The results found that even without subsidies, EVs are more cost-effective than internal combustion engine vehicles and as the fluctuation of fuel price becomes more stable, consumer preference to EV products increases. Another study used the real option model to analyze the adoption of EVs under uncertainty in fuel prices [10]. Their results identified a more optimal decision to invest in EVs over diesel-fueled vehicle in the current business environment. As public transportation is a “public good”, its evaluation from purely private cost basis will always be uneconomic. The social benefits arising from better public transport system such as GHG emissions reduction, social inclusion, development opportunities, and public acceptance should also be accounted for. Several studies integrate economic analysis with social and environmental impacts of the adoption of EVs for public transportation. For instance, [16] evaluated an optimal bus fleet combination for different driving conditions that minimize life cycle cost, GHG emissions, and conventional air pollutant emission impacts. The research found that electric bus is the dominant vehicle type for heavily congested driving cycles, the hybrid bus has more balanced performances due to lower initial investment compared to electric buses, while petroleum buses have seldom been selected in the model. In another study, [17] proposed a holistic, reliable, and transparent comparison of battery EVs and fuel cell EVs considering their environmental impacts (EI) and costs over their whole life cycle. Applying the life cycle assessment (LCA) and a life cycle costing, the findings show that battery EVs achieve lower environmental impact and TOC compared with fuel cell EVs. Considering the public acceptance, [18] examined the prevailing obstacles for market diffusion which encumber the development of EV technology adoption. Their results demonstrate that EVs acceptance in the case of Malaysia can be explained as being significantly related to social influences, Sustainability 2020, 12, 4720 3 of 14 performance attributes, financial benefits, environmental concerns, demographics, infrastructure readiness, and government interventions. This paper aims to contribute to the existing literature by proposing a more inclusive valuation framework for the adoption of EVs for public transport using the Philippines as a case study. The main objective of this research is to compare EVs and combustion vehicles for public transportation in terms of economic and environmental impacts as well as social acceptance. Economic indicators include the NPV, PBP, ROI, public utility vehicle (PUV) driver salary, and owner profit. Environmental impact analysis includes GHG emissions, electricity demand, fossil fuel demand, and air pollutants such as particulate matter (PM), nitrogen oxides (NOx), sulfur oxides (SOx), and carbon monoxide (CO) emissions. The social acceptance takes the perspective and outlook of various transportation stakeholders including PUV driver and passengers, other stakeholders (business owners, investors, gas/electricity distributors, PUV manufacturers), and experts (law, policy, governance, environment, labor, engineering, academe). This study finally aims to suggest government policies to support the adoption of EVs and to
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